The Link between International Remittances and Private Interhousehold Transfers

Berhe Mekonnen Beyene

Memo 14/2012

 

The paper studies the link between international remittances and interhousehold transfers. Using a simple insurance model, it is shown that households transfer a large fraction of the remittance they receive from relatives abroad to other households. The effect of remittances on interhousehold transfers is empirically investigated using an urban household survey from Ethiopia. Consistent with the prediction of the model, remittance has a strong positive effect on the amount of transfer given, controlling for total household income and other covariates.

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Published June 23, 2014 10:21 AM - Last modified Jan. 30, 2019 7:55 AM